How I saved over £7,000 on my lease extension
Buying my flat
I live in a leasehold flat and have done for 11 years. It is the first home I ever bought, and I have some wonderful memories over the years. When I bought it I was told there was 83 years left on the lease and as soon as 2 years was up, I should start the process to extend it (you usually have to live there for two years before doing it).
I know that once the term of a lease goes under 80 years the price to extend it jumps up because of “marriage value” (no, I’m not sure what that actually means either). When I had lived in the flat for two years I didn’t really have much money and I didn’t think it was particularly important so I didn’t do much about it – I was wrong.
In the now
Here I am, with a lease of about 72 years left and knowing that I urgently need to lengthen my lease, whether or not I move. My freeholders are known for being unscrupulous and I had a feeling it was not going to be smooth. I had no idea how bad it was going to be though. A neighbour in my block had extended their lease to 125 years, about 2-3 years ago, for a total cost of just under £15,000. I paid the fee that my freeholder charge to produce a valuation and their estimate came back 8 weeks later at (drumroll please) just over £27,000! I knew it was going to go up a bit in the two years since my neighbours had done theirs, but almost doubling the cost, for half the length (I was offered only 99 years) was a joke.
If I was ready to move, and had a buyer, I may well have just paid this to get a move on, but as I wasn’t in a rush, I could take my time. I think they are hoping that a lot of people only start the ball rolling when they are ready to move and therefore have to take that first offer. I was fortunate I wasn’t in that position. Firstly my solicitor wrote to them. They take 15 working days (yes really) to reply to any email and I only had four weeks to submit a counter offer. They basically said I couldn’t compare my lease to that of my neighbours as two years had passed.
Why a surveyor?
I got online and did some research. It became apparent that what I needed was a surveyor. I contacted local estate agents and solicitors and got advice. I finally went with a surveyor who was not only recommended but was able to come almost right away. My entire annual bonus (which on my budget was due to clear my outstanding loan) was spent on taking his services on, including to negotiate with my freeholder on my behalf. I am sure there are cheaper surveyors out there, but I was very impressed with him from the initial contact.
He has kept me updated at every stage, and always kept myself and any possible future buyers of my flat in mind. He has consulted me at every point and discussed and explained all aspects of the lease to me (not that I entirely understand it, but he clearly does and that’s what matters). His report was put together very quickly and it was safely submitted to the freeholders by the deadline. His valuation was not much different to what my neighbours paid a few years ago. 15 working days later I got the news….. not only had they agreed to all the terms that he requested (a lease of 125 years not 99 and a more favourable review of ground rent) but he had already saved me over £7,000!
The total now stands at just under £20,000. Not as low as I originally hoped, but already with a massive saving. As I am not in a rush, he has suggested that we submit a counter offer again. He has worked with my freeholders before and knows what they are like and when they will tell him what is their final offer. I believe that I will easily be able to save an additional amount equal to or greater than what I spent on his fees, thus saving me a minimum of £7,000 in total.
This is not an affiliate post – however I would be happy to recommend my surveyor should anyone want advice – feel free to get in touch.